Two of the area's largest banks reported record earings for 1985, gains made largely from increased income on interest from loans.

Bank of Virginia Co. reported record earnings for 1985, largely because of a 13 percent increase in interest income on loans.

Net income for the year, which is consolidated to reflect the merger of the bank holding company with Union Trust Bancorp of Maryland, rose 26 percent to $71.1 million ($3.05 a share) from $56.3 million ($2.48) in 1984.

Consolidated income for the fourth quarter of 1985 was $19.7 million (84 cents), a 33 percent increase over $14.9 million (65 cents) in the same period last year.

The reserve against bad loans rose to $64.5 million from $53.7 million, although its ratio of loan-loss reserves to loans rose only to 1.33 percent from 1.32 percent.

First Virginia Banks Inc. said earnings rose 11 percent to $40 million ($2.59 a share) from $36 million ($2.35) in 1984.

The company's 1984 results have been restated to include the earnings of two Virginia banks acquired in 1985: Citizens Bank and The Bank of Middlesex.

Consolidated fourth-quarter earnings were $10.8 million (70 cents), up 23 percent from $8.8 million (58 cents) a year earlier.